Oct 12, 2013 Quinn Thomas
Officials in states and cities across the country are taking aggressive steps to limit the reach of short term lending outlets. Lawmakers have sponsored bills and passed legislation aimed not only at regulating the industry, but limiting it to the point where it would be unable to operate.
Despite the steps taken by such officials in Colorado, the alterative credit practice continues to thrive. The Colorado Springs Business Journal recently reported that the even with the implementation of aggressive laws in 2010, short term lending outlets in the state have seen similar rates of business as they did before lawmakers targeted their operations.
Although the number of individuals that took out short term products dropped slightly to 440,865 in 2012 from 444,333 the year before, the value of the loans increased, according to data from Attorney General's Office, as cited by the source. Overall loan totals increased more than $2 million from year to year, and the average loan amount spiked from $376 to $384.
What this shows is that Colorado consumers are still actively seeking out these loans because they have proven to be a useful financial tool. Even with increased scrutiny and policies designed to limit consumer access to short term credit, Colorado residents are highlighting a desire to use these services.
Consumers without access
Although some officials might claim that the recently implemented laws have had negative impacts, lending experts told the Colorado Springs Business Journal that there are fewer short term outlets in operation this year than in years past, largely due to the intense regulations. This has only hurt Colorado consumers, as residents in some towns have been unable to access this useful credit option.
"Apart from what it's done to the people who work for the stores and the owners, it has served to eliminate access to this type of credit to a lot of consumers in a lot of markets," Ron Rockvam of the Colorado Financial Service Centers Association told the source. "Where there had been short term lenders in cities like Montrose, La Junta, Lamar and Sterling, people there have no access to this type of credit."
Data from the National Conference of State Legislatures indicated that the maximum value of short term loan can not exceed $500 in Colorado. Also, the source noted that minimum loan term for such a product must be at least six months.